American shareholders – and that's almost all of us with a 401k or another retirement account – have lost trillions so far this year on our stock holdings. This massive sell-off, combined with the cancer cell of 8 percent inflation, is said by many prominent economists to be the trigger for an unavoidable recession.

Maybe they're right. In the first quarter of this year, gross domestic product (GDP) was negative and, if this second quarter comes in below zero, we have technically landed in recession territory. once the economy crashes, it can take a long time to pick itself back up.

Remember, the 2008-09 recession pummeled the economy and we didn't totally recover until almost five years later.

I'm frustrated by this U-turn of economic events because, with COVID largely over for now and American firms – restaurants, stores, hotels, hospitals, amusement parks, movie theaters and office buildings – back open for business, and with millions of workers back on the job, the economy should be booming. Any recession now would cause a lot of pain and misery – especially for the middle class, which already is financially stressed.

A new Fox News poll found that 40 percent of Americans are worried about having enough money to pay their bills. The jobs market, which has been very healthy with its 11.5 million job openings, could quickly spasm into a steep contraction as "Help Wanted" signs are replaced by worker layoffs. Small business bankruptcies also rise during recessions.

So, we have to sideswipe a recession, if at all possible. The good news is there is still time to avoid careening into a ditch. But it will require the Biden administration to change its course, much the same way that President Clinton did so effectively in 1994. Three policy shifts could have a big impact by injecting some high-octane jet fuel into the economy.

First, we need to cut federal spending immediately. Runaway government spending, led by the borrowing of $4 trillion to fight the coronavirus, needs to be reined in now. President Biden should drop plans for new spending and call for a 10 percent to 15 percent across-the-board reduction in all agency budgets. This would send a strong signal to investors around the world that America is serious about fiscal responsibility.

Second, we need to pump rocket fuel into the supply side of the economy. President Ronald Reagan did this in 1981 and, when his tax cuts kicked in, the economy came out of its decade-long inflationary malaise with the roar of a lion. President Donald Trump used these same policies to keep inflation at or below 2 percent at a time of rapidly expanding output. Wages soared, America imported $1.5 trillion of capital into the country, and unemployment fell to its lowest level in half a century. Instead of trying to repeal the Trump tax cuts, President Biden should work to make those permanent and take credit for the policies.

Finally, since surging energy prices are a major source of today's inflation, we need to stop the war on American fossil fuels, at least until we get inflation down to between 2 percent and 4 percent. More drilling, more pipelines, more refineries and more permits for all of those would go a long way to increase American energy production and bring down prices.

Will this White House do any of these things? Probably not. But if President Biden wants to save millions of jobs – including his own, potentially – and if he wants to avoid the fate of one-termed President Jimmy Carter – this is the game plan that would work. History proves it.

Stephen Moore is a senior fellow at the Heritage Foundation and an economist with FreedomWorks. His latest book is: "Govzilla: How the Relentless Growth of Government Is Devouring Our Economy."